Learn how to create a Bank Reconciliation Statement (BRS) in TallyPrime with this step-by-step guide. Understand bank reconciliation, match bank transactions, handle pending cheques, record bank charges, and resolve balance differences with practical examples.
How to Create a Bank Reconciliation Statement (BRS) in TallyPrime: Complete Guide
Keeping your bank records accurate is an important part of managing any business. However, the balance shown in your bank account and the balance recorded in your accounting software do not always match. This difference is quite common and can happen for several reasons, such as pending cheque deposits, bank charges, automatic payments, or transactions that have not yet appeared in your bank statement.
This is where a Bank Reconciliation Statement (BRS) becomes useful.
TallyPrime makes bank reconciliation easier by allowing you to compare your bank transactions with the entries recorded in your books. You can identify missing transactions, check pending payments, account for bank charges, and understand why the balances are different.
In this guide, you will learn how to create a Bank Reconciliation Statement in TallyPrime, reconcile transactions step by step, understand common differences, and resolve reconciliation errors with practical examples.
What Is a Bank Reconciliation Statement (BRS)?
A Bank Reconciliation Statement (BRS) is a financial statement used to compare the bank balance recorded in your company's books with the balance shown in your bank statement.
The purpose is to identify and explain differences between these two balances.
For example, suppose your TallyPrime bank ledger shows a balance of ₹85,000, but your bank statement shows ₹82,500. Instead of assuming that something is wrong, you should investigate the transactions responsible for the ₹2,500 difference.
Some common reasons include:
Cheques issued but not yet presented for payment.
Cheques deposited but not yet credited by the bank.
Bank charges not recorded in TallyPrime.
Interest credited directly by the bank.
Automatic loan or EMI deductions.
Direct customer deposits into your bank account.
Errors in transaction amounts or dates.
Once these differences are identified and the relevant entries are recorded, you can reconcile your bank account more accurately.
Why Is Bank Reconciliation Important?
Bank reconciliation is not just an accounting formality. It helps business owners maintain reliable financial records and avoid unnecessary confusion when checking cash flow.
Here are some important benefits:
| Benefit | How It Helps |
|---|---|
| Accurate bank balance | Keeps accounting records aligned with bank transactions |
| Error detection | Helps identify incorrect or duplicate entries |
| Fraud prevention | Makes unusual or unauthorised transactions easier to notice |
| Expense tracking | Identifies bank charges, interest, and automatic deductions |
| Better cash management | Shows which payments and deposits are still pending |
| Reliable financial reports | Improves the accuracy of accounting information |
For example, if your bank deducts ₹750 as a service charge but you have not recorded it in TallyPrime, your books will show a higher balance than your actual bank account.
Regular reconciliation helps you catch such differences before they create problems.
What You Should Check Before Starting Bank Reconciliation
Before creating a BRS in TallyPrime, make sure you have the necessary information.
Keep these items ready:
Your company's bank statement.
The bank ledger created in TallyPrime.
Details of cheques issued and deposited.
Records of bank charges and interest.
The date up to which you want to reconcile transactions.
Also, verify that the bank ledger has been configured correctly.
If you have multiple bank accounts, select the correct bank ledger before starting the reconciliation process.
How to Create a Bank Reconciliation Statement in TallyPrime
TallyPrime provides a built-in Bank Reconciliation feature. You can use it to match the transactions recorded in your books with those appearing in your bank statement.
Follow these steps.
Step 1: Open Your Company in TallyPrime
Start TallyPrime and open the company for which you want to perform bank reconciliation.
Make sure you have selected the correct company, especially if you maintain accounts for multiple businesses.
Step 2: Open the Bank Ledger
From the Gateway of Tally, navigate to:
Gateway of Tally → Banking → Bank Reconciliation
Depending on your TallyPrime release and screen layout, you can also open the bank reconciliation report through the relevant bank ledger or banking reports.
Select the bank account you want to reconcile.
For example:
HDFC Bank
State Bank of India
ICICI Bank
Axis Bank
Punjab National Bank
TallyPrime will display the transactions recorded in the selected bank ledger.
Step 3: Select the Reconciliation Period
Choose the period for which you want to reconcile your bank transactions.
For example, if you are reconciling November 2026, select the appropriate date range:
From: 01-11-2026
To: 30-11-2026
The reconciliation report will display the relevant bank transactions for the selected period.
Step 4: Enter the Bank Date
This is one of the most important steps in bank reconciliation.
The date recorded in TallyPrime may be different from the date on which the transaction actually appears in your bank statement.
For example:
Cheque issued date in TallyPrime: 5 November 2026.
Cheque cleared date in bank statement: 8 November 2026.
In this situation, enter 8 November 2026 as the bank date for that transaction.
This helps TallyPrime identify when the transaction was actually processed by the bank.
Step 5: Reconcile Your Bank Transactions
Compare each transaction displayed in TallyPrime with the corresponding entry in your bank statement.
For transactions that have cleared through the bank, enter the appropriate bank date in the reconciliation screen.
Check the following carefully:
Transaction amount.
Payment or receipt details.
Cheque number, if applicable.
Actual transaction date in the bank statement.
Whether the transaction has been cleared.
Repeat this process for all relevant transactions.
Transactions that have not yet appeared in your bank statement should remain unreconciled until they are processed by the bank.
Step 6: Check the Reconciled Bank Balance
After entering the bank dates, review the reconciliation report.
TallyPrime updates the reconciliation information based on the dates you enter.
Check whether the reconciled balance matches your bank statement balance as of the selected date.
If there is still a difference, investigate the unreconciled transactions and any missing bank entries.
Step 7: Save and Review the Reconciliation Report
After completing the reconciliation, review the report once again.
Make sure that:
All cleared transactions have been reconciled.
Pending cheques are still shown as outstanding.
Bank charges have been recorded correctly.
Direct bank credits and deductions have been entered.
No transaction has been reconciled incorrectly.
Your Bank Reconciliation Statement is now updated for the selected period.
Practical Example of Bank Reconciliation in TallyPrime
Let's understand the process with a simple business example.
Suppose ABC Traders has a bank ledger balance of ₹1,00,000 in TallyPrime as of 30 November 2026.
However, the bank statement shows a balance of ₹96,800.
After checking both records, the accountant discovers the following differences:
| Particulars | Amount |
|---|---|
| Balance as per TallyPrime | ₹1,00,000 |
| Cheque issued but not presented | ₹5,000 |
| Cheque deposited but not credited | ₹8,000 |
| Bank charges not recorded | ₹200 |
| Interest credited by bank but not recorded | ₹0 |
For this example, assume the cheque issued and deposited transactions are already recorded in TallyPrime.
The reconciliation calculation will be:
| Particulars | Amount |
|---|---|
| Balance as per TallyPrime | ₹1,00,000 |
| Less: Cheque issued but not presented | ₹5,000 |
| Add: Cheque deposited but not credited | ₹8,000 |
| Less: Bank charges | ₹200 |
| Balance as per Bank Statement | ₹1,02,800 |
This example shows a balance of ₹1,02,800, not ₹96,800.
Therefore, the figures do not support the assumed bank statement balance of ₹96,800. The accountant must investigate additional missing transactions or errors rather than forcing the reconciliation to match.
This is an important part of the BRS process: every difference must have a valid explanation.
How to Record Bank Charges in TallyPrime
Banks regularly deduct charges for account maintenance, cheque processing, SMS alerts, and other services.
If these charges are not recorded in your books, your bank ledger will not match the bank statement.
For example, suppose your bank deducts ₹500 as service charges.
You can record the transaction using a Payment Voucher.
Follow these steps:
Open Gateway of Tally → Vouchers.
Select the Payment Voucher.
Choose the appropriate bank ledger.
Select Bank Charges as the expense ledger.
Enter ₹500 as the amount.
Save the voucher.
The accounting entry will be:
| Particulars | Debit | Credit |
|---|---|---|
| Bank Charges A/c | ₹500 | |
| Bank A/c | ₹500 |
This entry reduces your bank balance in the books and helps match the bank statement.
How to Record Bank Interest in TallyPrime
Sometimes the bank credits interest directly to your savings or current account.
If this amount is missing from TallyPrime, you should record it through a Receipt Voucher.
For example, suppose your bank credits ₹1,200 as interest.
The accounting entry will be:
| Particulars | Debit | Credit |
|---|---|---|
| Bank A/c | ₹1,200 | |
| Interest Received A/c | ₹1,200 |
After recording the entry, return to the Bank Reconciliation report and reconcile the transaction using the actual bank date.
How to Handle Unreconciled Transactions
Unreconciled transactions are entries recorded in TallyPrime that have not yet been matched with the bank statement.
They are not necessarily errors.
For example:
A cheque issued to a supplier may take several days to clear.
A customer cheque deposited into your account may still be under processing.
A bank transfer may take time to appear in the statement.
Do not delete or modify these transactions simply because they have not cleared.
Keep them unreconciled until the corresponding bank transaction appears.
However, if an entry remains pending for an unusually long time, investigate it with your bank or the concerned party.
Common Bank Reconciliation Problems and Their Solutions
Even when you follow the correct procedure, you may encounter differences between your books and bank statements.
Here are some common problems and how to resolve them.
| Problem | Possible Reason | Solution |
|---|---|---|
| Bank balance does not match | Missing bank transaction | Check the bank statement and record missing entries |
| Cheque remains unreconciled | Cheque has not cleared | Wait until the bank processes it |
| Incorrect reconciliation date | Wrong bank date entered | Correct the bank date after verification |
| Bank charges missing | Charges not entered in books | Record them using a Payment Voucher |
| Direct deposit missing | Customer paid directly into the bank | Record the appropriate Receipt Voucher |
| Duplicate transaction | Same entry recorded twice | Verify the vouchers and correct the duplicate |
| Difference in transaction amount | Incorrect amount entered | Check the bank statement and correct the accounting entry |
Always verify the original transaction before making corrections. Changing a bank date alone will not fix an incorrect accounting entry.
How Often Should You Prepare a Bank Reconciliation Statement?
There is no need to wait until the end of the financial year to reconcile your bank account.
The frequency depends on your business transaction volume.
| Business Type | Recommended Frequency |
|---|---|
| Small business | Weekly or monthly |
| Retail shop | Weekly |
| Trading business | Daily or weekly |
| Medium-sized company | Weekly or monthly |
| High-volume business | Daily |
For businesses with frequent bank transfers, UPI payments, card settlements, and online transactions, more frequent reconciliation can help identify missing entries quickly.
Tips for Maintaining Accurate Bank Reconciliation Records
A few simple accounting practices can make reconciliation much easier.
Record bank transactions regularly instead of waiting until month-end.
Keep digital or printed copies of bank statements.
Enter the correct cheque numbers and transaction dates.
Record bank charges and interest as soon as they appear.
Avoid deleting old unreconciled entries without investigation.
Reconcile every active bank account separately.
Review long-pending cheques regularly.
Keep a backup of your accounting data.
These habits reduce accounting errors and make financial reporting more reliable.
Conclusion
Creating a Bank Reconciliation Statement in TallyPrime is an essential accounting task for maintaining accurate financial records. It helps you compare your bank ledger with your actual bank statement, identify pending transactions, and detect missing or incorrect entries.
By regularly using the Bank Reconciliation feature, recording bank charges, and checking unreconciled transactions, you can keep your business accounts organised and maintain better control over your cash flow.
Whether you run a small retail shop or a growing company, regular bank reconciliation can save time, prevent accounting mistakes, and make financial management easier.
Frequently Asked Questions (FAQs)
What is BRS in TallyPrime?
BRS stands for Bank Reconciliation Statement. It is used to compare the bank balance in TallyPrime with the balance shown in your bank statement.
How do I open Bank Reconciliation in TallyPrime?
Open your company and navigate to Gateway of Tally → Banking → Bank Reconciliation. Select the bank ledger you want to reconcile.
Can I reconcile bank transactions automatically in TallyPrime?
TallyPrime supports bank statement import and reconciliation features for supported bank formats and configurations. You can also reconcile transactions manually by entering bank dates.
Why is my bank balance different in TallyPrime?
Differences may occur because of pending cheques, unrecorded bank charges, direct deposits, automatic deductions, or incorrect accounting entries.
How often should I perform bank reconciliation?
Small businesses can reconcile weekly or monthly, while businesses with frequent banking transactions should consider daily or weekly reconciliation.
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